ESSAM ARAFA v. HEALTH EXPRESS CORPORATION

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1862-17T3

ESSAM ARAFA, on behalf
of himself and others
similarly situated,

          Plaintiff-Appellant,

v.

HEALTH EXPRESS
CORPORATION,

     Defendant- Respondent.
_______________________________

                    Argued May 13, 2019 – Decided June 5, 2019

                    Before Judges Messano, Fasciale and Rose.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Middlesex County, Docket No. L-4792-17.

                    Anthony S. Almeida argued the cause for appellant
                    (The Sattiraju Law Firm, PC, attorneys; Ravi Sattiraju,
                    of counsel and on the brief; Anthony S. Almeida, on the
                    brief).

                    Michael T. Grosso argued the cause for respondent
                    (Littler Mendelson, PC, attorneys; Michael T. Grosso
                    and Dylan C. Dindial, on the brief).
PER CURIAM

      We granted permission to reinstate this appeal, which is from a December

6, 2017 order granting defendant's motion to dismiss and compel arbitration, in

the aftermath of the Supreme Court's decision in New Prime Inc. v. Oliveira,

586 U.S. ___,  139 S. Ct. 532 (2019). 1 Relying on New Prime, we now reverse

and remand.

      Pursuant to a "contract of employment" entered into between plaintiff and

defendant, plaintiff drove a truck and delivered defendant's pharmaceutical

products in and around New Jersey.          Defendant classified plaintiff as an

independent contractor instead of an employee. That classification led to this

lawsuit, in which plaintiff alleged that defendant violated two statutes: the New

Jersey Wage and Hour Law,  N.J.S.A. 34:11-56a to -56a38; and the New Jersey

Wage Payment Law,  N.J.S.A. 34:11-4.1 to -4.14.             Plaintiff alleged that

defendant violated these statutes by failing to pay plaintiff for all of the hours

that he worked and by withholding money from him.


1
  We originally listed argument for May 21, 2018, but granted an adjournment
because on that day, the Court issued its opinion in Epic Systems Corp. v. Lewis,
584 U.S. ___,  138 S. Ct. 1612 (2018). Counsel returned for oral argument in
October 2018, but voluntarily dismissed the appeal since the Supreme Court
granted certiorari in Oliveira v. New Prime, Inc.,  857 F.3d 7 (1st Cir. 2017),
cert. granted, 586 U.S. ___,  138 S. Ct. 1164 (2019). We allowed the parties to
reinstate the appeal after the Court decided New Prime.
                                                                          A-1862-17T3
                                        2
      In support of its motion to dismiss and compel arbitration, defendant

relied on the parties' arbitration agreement. The agreement specifically states:

"This Agreement is governed by the Federal Arbitration Act [(FAA)], 9

[U.S.C.A. §§ 1 to 16]." Notwithstanding his status as an employee or an

independent contractor, plaintiff opposed the motion relying on 9 U.S.C. § 1,

which states in pertinent part "nothing herein contained shall apply to contracts

of employment . . . of workers engaged in foreign or interstate commerce." He

contended that his employment agreement qualified under Section 1. Plaintiff

argued that because the FAA itself exempted employment contracts like his, it

could not govern the parties' arbitration proceeding. In other words, the parties

lacked a meeting of the minds. The judge granted defendant's motion without

addressing the FAA argument and without conducting oral argument, although

plaintiff had requested it.

      On appeal, plaintiff maintains (like Oliveira in New Prime) that even as

an independent contractor – as opposed to an employee – his contract with

defendant qualifies as a "contract of employment" under Section 1. In New

Prime, the Court resolved this question. Applying the meaning of the FAA as

enacted in 1925, the Court concluded that a "contract of employment" meant

"nothing more than an agreement to perform work." New Prime, 139 S. Ct. at


                                                                         A-1862-17T3
                                       3
539. "As a result, most people then would have understood § 1 to exclude not

only agreements between employers and employees but also agreements that

require independent contractors to perform work." Ibid. Therefore, the Court

upheld the First Circuit's determination that it "lacked authority under the [FAA]

to order arbitration." Id. at 544.

      Relying on New Prime, we conclude that plaintiff's employment contract

qualifies under Section 1 under the FAA. Consequently, the FAA cannot govern

the arbitration agreement, as contemplated by the parties. The inapplicability of

the FAA to the parties' arbitration agreement undermines the entire premise of

their contract. Because the FAA cannot apply to the arbitration, as required by

the parties, their arbitration agreement is unenforceable for lack of mutual

assent. And because the arbitration agreement is invalid, all other arbitration

issues are moot.

      Reversed and remanded. We do not retain jurisdiction.




                                                                          A-1862-17T3
                                        4